May July spread

[farming101]

Losing ground today
May limit down

[Partners]

Any truth that Canada is now importing canola ?
Or just the Chinese selling it back to us?

[AlbertaFarmer5]

Any truth that Canada is now importing canola ?
Or just the Chinese selling it back to us?

Email from local elevator today:

Markets took a real hit today with canola limiting down. This has shaken other grain futures as well and so we have seen some significant movement across the boards. Canola has been impacted by several influences the biggest being that Eastern Canada has been importing European canola for crush plants. When we can import canola cheaper than buying domestic it leads to reactions on the markets.

Yet a few days ago it was stated on Agriville that the EU has imported more canola than China this year.

Considering the high freight rates( and getting higher), something doesn't add up.

[TASFarms]

Price will go back up even higher. Trucks are coming for my April contract already. Can’t be much canola around.

[Dirtfarmer1]

Pioneer near me has to take in some contracted feb/ march canola yet.

They prob wont take my april contract yet for another 2 or 3 weeks

[errolanderson]

Our canola market is now a function of remaining demand for old crop. Supplies appear meeting demand needs especially if movement is now being deferred. New crop basis levels have now weakened.

Chart technicals have definitely turned south. The old crop price top is in (IMO).

Remember, July is at a big discount to May. Don’t store into a discounted market. Sell the inverse. This market is begging you to sell. But this courtship may not last.

[AlbertaFarmer5]

From Jan 21

The EU now is the single largest importer of Canadian canola year-to-date. At the same time, China’s demand for oilseeds has been revitalized by the recovery in their swine herd from African Swine Fever (ASF). The huge demand by China for oilseeds as well as oilseed products has led to the maximum usage of crush capacity everywhere (incl. in Canada), especially given the short crop in Argentina this year. As a consequence, Canadian canola shipments to China have also improved by 459k MT year-to-date, for a combined EU-China effect of 855k MT on the canola seed side alone. Exports to all other major destinations (Japan, Mexico, UAE) are also up significantly.

From: https://www.saskcanola.com/quadrant/media/files/downloads/market-commentary/2021_01_18_Canola_Market_Outlook.pdf https://www.saskcanola.com/quadrant/media/files/downloads/market-commentary/2021_01_18_Canola_Market_Outlook.pdf

What supplies are they finding to export canola back to Canada? Especially with a shipping shortage?